Winnebago County, Illinois Short-Term Rental Regulation: A Guide For Airbnb Hosts

Starting a Short-Term Rental Business in Winnebago County

To operate a short-term rental like an Airbnb or VRBO in Winnebago County, Illinois, you'll need to comply with applicable regulations at both the county and municipal level.

Winnebago County itself does not appear to have specific STR ordinances based on a search of the county's code library. However, individual cities within the county, like Rockford, do regulate short-term rentals.

In the City of Rockford, STR operators must obtain a Rental Property Registration from the city. This involves registering on the city's Rental Registry website and providing property details. The registry was established to help reduce nuisance issues at rental properties through better communication between the city and landlords.

Rockford STR hosts may also need to collect a Room Tax from guests and remit it to the city, similar to requirements in nearby Oshkosh, Wisconsin. There, hosts need a Room Tax Permit in addition to a Short-Term Rental Permit. The 10% room tax helps fund tourism initiatives.

Real estate investing forums provide some additional context around being a landlord in Winnebago County. On BiggerPockets, one new investor asked about tenant-landlord laws in Rockford as they considered a lease-option deal. While that thread didn't surface any STR-specific insights, another BiggerPockets thread announced the launch of a dedicated Short-Term and Vacation Rental subforum to discuss the unique aspects of this investing niche.

Over on the Rockford subreddit, a renter asked for input on "apartments to avoid" in the area. Replies pointed out some poorly managed properties and areas to steer clear of that an STR investor would likely want to avoid as well. Understanding the characteristics of different neighborhoods seems important for choosing a viable STR property in the Rockford area.

In summary, while Winnebago County may not directly regulate short-term rentals, hosts still need to research and comply with all STR rules in their specific municipality, like registering their rental property in Rockford and potentially collecting room tax from guests. Engaging with local investor and resident forums can also provide helpful context for choosing and operating STR properties in the county.

Short-Term Rental Licensing Requirements in Winnebago County

To operate a short-term rental in Winnebago County, Illinois, you may need to obtain certain licenses and permits, primarily at the municipal level. Here are the key requirements based on information from the county's official website:

• Winnebago County Health Department Licensing: STRs are classified as "Tourist Rooming Houses" by the health department. Hosts need to obtain a health permit and undergo an inspection to ensure the property meets health and safety standards. This involves submitting an application, floor plans, proposed STR listing details, and applicable fees to the health department.
• Municipal Rental Registration: Some cities within Winnebago County, like Rockford, require all rental properties (including STRs) to be registered. In Rockford, you must create an account on the city's Rental Registry website and provide your STR's details. There may be a registration fee required.
• Municipal STR Permit: Certain municipalities may have specific STR ordinances and permitting requirements. For example, the nearby City of Oshkosh, WI requires hosts to obtain a Short Term Rental Permit from their Community Development Department. Check with your local city/village administration for any STR-specific permits.
• Room Tax Collection: Like the 10% room tax in Oshkosh, your Winnebago County municipality may require you to obtain a Room Tax Permit, collect a room tax from guests, and remit it to the city. Failure to comply can result in fines and penalties.
• Building and Zoning Permits: If you're constructing a new STR property or making significant renovations/additions, you'll likely need building and zoning permits from the county's Regional Planning & Zoning Department. Submit construction plans, a completed permit application, and pay the required fees.

To obtain these licenses and permits, contact the relevant departments:

1. Winnebago County Health Department: Submit STR health permit application, plans, and fees by mail (PO Box 2808, Oshkosh, WI 54903) or email (WCHDEH@winnebagocountywi.gov)
2. Regional Planning & Zoning Department: Apply for building/zoning permits by providing plans, application, and fees
3. Your Municipal Clerk's Office: Register your STR, obtain any required municipal STR permits and room tax permits, and pay applicable fees
4. The licensing process time can vary but may take several weeks to a couple of months, so apply well in advance of when you intend to start operating your STR.

Failure to comply with STR licensing requirements can result in fines, penalties, and potentially being barred from operating. In Winnebago County, not obtaining a required permit can lead to:

Violation notices

1. Double permit fees if you apply after-the-fact
2. Municipal citations and fines up to a certain dollar amount per day of violation
3. Court appearances and substantial additional fines if you contest the citation
4. Potential jail time for repeated non-compliance

So it's critical to thoroughly research and obtain all required licenses and permits for your Winnebago County STR to avoid legal and financial consequences. Consult with your municipal clerk's office and the county's zoning and health departments for the most up-to-date and comprehensive STR licensing requirements.

Required Documents for Winnebago County Short-Term Rentals

To operate a short-term rental in Winnebago County, Illinois, you'll need to submit several documents to obtain the necessary licenses and permits. Here are the key required documents based on county and municipal regulations:

Winnebago County Health Department STR Application: This application is required to obtain a health permit for your STR, which is classified as a "Tourist Rooming House." The application collects information about your STR property, including the address, owner details, and proposed listing information. Submit the completed application, along with floor plans and applicable fees, to the health department by mail or email.

Municipal Rental Registration Form: In cities like Rockford that require all rental properties to be registered, you'll need to fill out a rental registration form on the city's Rental Registry website. This form collects basic details about your STR property and ownership to help the city communicate with landlords and address any nuisance issues.

Municipal STR Permit Application: Some Winnebago County municipalities may require a specific STR permit, similar to the Short Term Rental Permit in nearby Oshkosh, WI. This application gathers more extensive details about your STR, including floor plans, maximum occupancy, parking arrangements, and compliance with building codes. Contact your local city/village clerk's office for any STR permit applications.

Room Tax Permit Application: If your municipality requires STR operators to collect a room tax from guests, you'll need to apply for a Room Tax Permit. This application registers you to collect and remit the tax to the city. Obtain the application from your municipal clerk's office.

Building/Zoning Permit Applications: For new STR construction or significant renovations, you must apply for building and zoning permits from the Winnebago County Regional Planning & Zoning Department. Submit the relevant application (e.g. Commercial & Residential Building Permit Application, Zoning Clearance Application) along with construction plans and fees.

Proof of Insurance: You may be required to provide proof of liability insurance coverage for your STR. Check with the county health department and your municipality for any specific insurance documentation requirements.

Property Management Agreement: If you're using a property management company to operate your STR, you may need to provide a copy of your management agreement to the county or city to demonstrate who is responsible for the property.

In summary, the key documents you'll likely need for your Winnebago County STR include:

1. County health department STR/Tourist Rooming House application
2. Municipal rental registration form
3. Municipal STR permit application (if applicable)
4. Municipal room tax permit application (if applicable)
5. Building/zoning permit applications for construction
6. Proof of STR liability insurance
7. Property management agreement (if applicable)

Submit these documents, along with any required plans and fees, to the Winnebago County Health Department, your city/village clerk's office, and/or the county Regional Planning & Zoning Department as specified in the application instructions. Consult directly with these departments for the most current application forms and requirements.

Winnebago County Short-Term Rental Taxes

When operating a short-term rental business in Winnebago County, Illinois, it's crucial to understand and comply with all applicable taxes. Here's a breakdown of the key taxes STR hosts need to be aware of:

Winnebago County Hotel/Motel Tax: Winnebago County imposes a hotel/motel tax on the rental of rooms for overnight lodging, including STRs. The current tax rate is 5% of the room rental charge. STR hosts must register with the county, collect this tax from guests, and remit it to the county treasurer's office on a quarterly basis.

Municipal Room Tax: Some cities within Winnebago County, like Rockford, levy an additional room tax on STRs. For example, the City of Rockford imposes a 7% room tax on the rental of rooms for less than 30 days. STR operators in Rockford need to obtain a room tax permit, collect the 7% tax from guests, and remit it to the city.

Illinois Hotel Operators' Occupation Tax: The state of Illinois imposes a Hotel Operators' Occupation Tax on businesses renting out accommodations for less than 30 days. The current tax rate is 6% of gross rental receipts. STR hosts must register with the Illinois Department of Revenue, collect this tax from guests, and file returns and payments on a quarterly basis.

Illinois Sales Tax: STRs in Illinois are also subject to state and local sales taxes. The current state sales tax rate is 6.25%, and municipalities can impose an additional local sales tax. STR operators need to collect applicable state and local sales taxes from guests and remit them to the Illinois Department of Revenue.

It's important to note that tax rates and requirements can change, so STR hosts should regularly check with the Winnebago County Treasurer's Office, their municipal clerk's office, and the Illinois Department of Revenue for the most current tax obligations.

Possible Write-Offs and Deductions

STR operators in Winnebago County may be able to deduct certain expenses related to their rental business on their federal and state income tax returns. Some potential write-offs and deductions include:

1. Mortgage interest and property taxes
2. Depreciation of the rental property and furnishings
3. Utilities, insurance, and HOA fees attributable to the rental
4. Cleaning, maintenance, and repair costs
5. Supplies and amenities provided to guests
6. Advertising and marketing expenses
7. Business travel and transportation costs
8. Legal and professional fees
9. Home office expenses (if you use part of your home exclusively for your STR business)

To claim these deductions, STR hosts need to keep detailed records and receipts. Consult with a tax professional to determine which expenses you can write off and how to properly document them.

By understanding and staying on top of all applicable taxes and taking advantage of available deductions, Winnebago County STR operators can ensure compliance and maximize the profitability of their rental business.

Illinois Wide Short-Term Rental Rules

In addition to county and municipal regulations, short-term rental hosts in Winnebago County, Illinois must also comply with state-level rules governing the industry. Here are the key Illinois-wide STR requirements:

Definition of a Short-Term Rental: Under Illinois House Bill 2919 (HB2919), a short-term rental is defined as a residential dwelling unit rented for a fee for less than 30 consecutive days, including single-family homes, units in multi-unit buildings, condos, co-ops, and timeshares.

Taxation: The Illinois Short-Term Rental Occupation Tax Act (Senate Bill 2564) imposes two taxes on STR operators: a 5% tax and a 1% tax, both calculated on 94% of gross rental receipts. STR platforms like Airbnb and Vrbo are required to collect and remit these taxes on behalf of hosts.

Licensing and Registration: If renting out two or more units in a building with at least four units, STR operators must obtain a license from the Illinois Department of Public Health. For smaller operations, like renting a room in your home, registration with the state is required but not a full license.

Insurance Requirements: While there are no state-mandated insurance requirements for STRs, many municipalities require hosts to secure liability coverage. It's prudent for Winnebago County hosts to carry robust STR insurance to protect their properties and businesses.

Building and Safety Standards: STRs in Illinois must meet applicable building codes, fire safety requirements, and health standards. Some municipalities, like Chicago, require regular property inspections to ensure compliance.

Zoning Restrictions: Illinois allows local governments to regulate STRs through zoning ordinances. Some cities prohibit STRs in certain residential zones or require special permits. Winnebago County hosts should check their local zoning laws.

Homeowners Association Rules: If your STR is part of a homeowners association (HOA), you must comply with any HOA restrictions on short-term rentals. Some HOAs limit or prohibit STRs in their communities.

Record-Keeping: Illinois requires STR operators to maintain detailed records, including guest names, addresses, and rental dates, for at least three years. These records must be available for inspection by state and local authorities.

Anti-Discrimination Laws: STR hosts in Illinois must comply with state and federal anti-discrimination laws, which prohibit discrimination based on factors like race, religion, national origin, and disability.

Consumer Protection: Illinois' Consumer Fraud and Deceptive Business Practices Act protects guests against misrepresentation and unfair practices. STR listings must accurately reflect the property and amenities provided.

Winnebago County STR hosts should familiarize themselves with these state-wide rules and ensure full compliance to avoid potential fines and legal issues. Consulting with a local attorney specializing in STR regulations can help navigate the complex landscape of Illinois short-term rental law.

Does Winnebago County Strictly Enforce STR Rules?

Based on discussions in real estate investing forums like BiggerPockets and Reddit, it appears that Winnebago County does not have a reputation for strictly enforcing short-term rental (STR) regulations compared to some other jurisdictions. However, the county is not necessarily considered "Airbnb friendly" either.

While Winnebago County itself does not seem to have specific STR ordinances, hosts still need to comply with rules in their particular municipality. For example, the City of Rockford requires STRs to register as rental properties. But overall, the county has fewer STR-specific restrictions than major cities like Chicago.

That said, there are definitely STR hosts operating in Winnebago County. A search on Airbnb shows over 100 active listings, primarily entire homes, concentrated in Rockford and along the Rock River. The listings have fairly positive reviews, suggesting that many hosts are able to run STRs without significant issues from the county or cities.

However, prospective hosts should not assume they can ignore all rules and operate under the radar. One post on the Rockford subreddit expressed concerns about a neighbor's plans to convert a property to an Airbnb in an area not zoned for it. So while enforcement may be looser than in some areas, hosts still face risks if they blatantly violate local regulations.

Ultimately, real estate investors seem to view Winnebago County as a viable Airbnb market, but not necessarily the most STR-friendly area. Hosts can likely operate STRs if they do their due diligence on local rules, obtain required permits, and are respectful of neighbors. But those looking for the path of least resistance may prefer even more lenient markets.

The bottom line is that Winnebago County STR operators should thoroughly research the specific rules for their property, as enforcement and regulations can vary by municipality. But compared to major cities cracking down on Airbnb, Winnebago offers a bit more flexibility for hosts who follow the key requirements.

How to Start a Short-Term Rental Business in Winnebago County

Starting a short-term rental business in Winnebago County, Illinois requires careful planning and execution. Here's a step-by-step guide to help you get started:

1. Research local regulations: Before investing in an STR property, thoroughly research all applicable regulations in Winnebago County and your specific municipality. The City of Rockford, for example, requires all rental properties (including STRs) to be registered on their Rental Registry website. Familiarize yourself with zoning laws, permitting requirements, and any STR-specific ordinances.
2. Assess the market: Analyze the local STR market to gauge demand, identify your target guests, and scope out the competition. Look at similar listings on platforms like Airbnb and VRBO to see what amenities they offer and what rates they charge. Consider your property's unique selling points and how you can differentiate your STR business.
3. Create a business plan: Develop a comprehensive business plan that outlines your objectives, target market, competitive advantages, financial projections, and marketing strategy. A well-crafted plan will guide your decision-making and help you secure financing if needed. Be sure to factor in all costs associated with starting and operating your STR business.
4. Choose a legal structure: Consult with a local attorney and accountant to determine the best legal structure for your STR business, such as a sole proprietorship, partnership, or limited liability company (LLC). Forming an LLC can help protect your personal assets and provide tax benefits. Register your business with the state and obtain any necessary licenses and permits.
5. Prepare your property: Invest time and resources into making your STR property attractive, comfortable, and guest-ready. Consider the needs of your target market and provide amenities that will appeal to them. Hire professional cleaners to ensure the space is spotless between guests. Install smart locks and other technology to streamline the check-in process and enhance the guest experience.
6. List your property: Create compelling listings on popular STR platforms like Airbnb and VRBO, as well as on your own website if you have one. Hire a professional photographer to showcase your property's best features. Craft an engaging description that highlights your STR's unique selling points and the local area's attractions. Be responsive to inquiries and guest reviews to build a positive reputation.
7. Automate your operations: Use vacation rental software and tools to streamline tasks like booking management, guest communication, and cleaning coordination. Automating repetitive processes will save you time and ensure a seamless experience for your guests. Consider hiring a co-host or property manager to assist with day-to-day operations, especially if you have multiple STR properties.
8. Stay compliant and adapt: Keep accurate records of your income and expenses for tax purposes, and stay up-to-date with any changes in local STR regulations. Regularly assess your performance and guest feedback to identify areas for improvement. Be prepared to adapt your business model as market conditions evolve and new opportunities arise.

By following these steps and seeking guidance from local experts, you can successfully launch and grow a short-term rental business in Winnebago County. Remember to prioritize guest satisfaction, maintain open communication with your municipality, and continually invest in your property and business to stay competitive in the dynamic STR market.

Who to Contact in Winnebago County about Short-Term Rental Regulations and Zoning?

To get the most accurate and up-to-date information about short-term rental (STR) regulations and zoning in Winnebago County, Illinois, contact the following departments:

Winnebago County Health Department: For questions about health permits, inspections, and licensing requirements for STRs (classified as "Tourist Rooming Houses"), contact the Environmental Health division:

1. Phone: (920) 232-3000
2. Email: WCHDEH@winnebagocountywi.gov
3. Address: 112 Otter Ave, PO Box 2808, Oshkosh, WI 54903

Winnebago County Regional Planning & Zoning Department: For inquiries about zoning regulations, building permits, and land use policies affecting STRs in unincorporated areas of the county, reach out to:

1. Planning: (920) 232-3340
2. Zoning: (920) 232-3344
3. Address: 112 Otter Ave, Oshkosh, WI 54901

City of Rockford: If your STR is located within Rockford city limits, contact the city's Customer Service Center for information on rental property registration and other municipal requirements:

1. Phone: (779) 348-7300
2. Address: 425 East State Street, Rockford, IL 61104

In addition to these official resources, STR hosts in Winnebago County may find the following online communities and forums helpful for connecting with other local hosts, sharing experiences, and staying informed about industry trends and best practices:

BiggerPockets Short Term Rental & Airbnb Investing Forum: This active forum on the popular real estate investing platform covers a wide range of STR topics and attracts hosts from across the country.

Rockford Subreddit: While not exclusively focused on STRs, this subreddit for Rockford residents sometimes features discussions related to local Airbnb hosting and rental regulations.

Airbnb Host Forums on Reddit: Two subreddits, r/airbnb_hosts, and r/AirBNBHosts, provide platforms for hosts to ask questions, share advice, and discuss various aspects of STR operations.

By contacting the appropriate county and municipal departments and engaging with online host communities, Winnebago County STR operators can stay informed about the regulatory landscape and connect with fellow hosts for support and insights.

What Do Airbnb Hosts in Winnebago County on Reddit and Bigger Pockets Think about Local Regulations?

To get a sense of how short-term rental hosts in Winnebago County, Illinois feel about local regulations, I searched relevant forums and online communities. Here are some key insights and experiences shared by local hosts:

Rockford Subreddit: In a thread titled "Its almost 2024. Should invest in Airbnb in Rockford?", a new investor was looking to connect with STR operators in Rockford to gauge if now is a good time to buy an Airbnb property there. While no Rockford hosts directly responded, the post suggests there is interest in the STR market in Winnebago County's largest city.

BiggerPockets STR Forum: One post on the BiggerPockets STR forum discussed how a host's city (Wisconsin Dells) has regulations requiring STRs to be rented for no less than 7 days but no more than 29 days. However, the host noticed many Airbnb listings allowing shorter bookings, not adhering to the city's rules. The host wanted to comply with regulations but had trouble getting clarification from the city. This highlights the challenge of navigating local STR ordinances and the importance of due diligence.

r/AirBnBHosts Subreddit: In a post titled "Navigating around a city's restrictions", a host shared their experience with their city adding new restrictions and zoning rules that impacted their STR. The host was considering switching to 30-day minimum stays and using technicalities to potentially circumvent the rules. However, commenters cautioned against this approach, noting it could raise red flags for guests and that the host is better off pivoting to a more STR-friendly market.

The limited discussion of Winnebago County's STR market on these forums could suggest it's a smaller market with less activity compared to major metros or popular vacation destinations. However, the presence of some Airbnb listings in the area, as well as investor interest, indicates there is still potential for STRs in the county.

Ultimately, aspiring Winnebago County STR hosts should thoroughly research the specific regulations in their city or town, engage with local officials for clarity, and carefully weigh the risks and rewards of operating in a market with increasing restrictions. Connecting with experienced local hosts, if possible, can provide valuable first-hand insights into navigating the regulatory landscape.

Disclaimer: While we here at BNBCalc strive to keep all of our regulation guides updated and accurate with all the latest local laws, we still do not suggest using them as your sole or primary source for local regulations. We also do not recommend you rely on the third-party sources we link to or reference, and we are not responsible for any of the information on these third-party sites. These guides are for entertainment purposes only and only provide basic information and should not be considered as legal advice.

We highly recommend directly contacting the responsible parties for each and hearing what their officials have to say. Ultimately, it's your responsibility as an investor to ensure you fully comply with the local laws, and it's best to speak with professionals before making an investment decision.